INDENTURE OF TRUST. by and between. INDIANA SECONDARY MARKET FOR EDUCATION LOANS, INC. as Corporation. and. ZIONS FIRST NATIONAL BANK, as Trustee

Transcription

1 INDENTURE OF TRUST by and between INDIANA SECONDARY MARKET FOR EDUCATION LOANS, INC. as Corporation and ZIONS FIRST NATIONAL BANK, as Trustee $152,500,000 Student Loan Asset-Backed Notes, Series 2014 (Taxable LIBOR Floating Rate Notes) Dated as of November 1, 2014

2 TABLE OF CONTENTS Page ARTICLE I DEFINITIONS AND USE OF PHRASES... 3 ARTICLE II NOTE DETAILS, FORM OF NOTES, REDEMPTION OF NOTES AND USE OF PROCEEDS OF NOTES Section Note Details Section Execution of Notes Section Registration, Transfer and Exchange of Notes; Persons Treated as Registered Owners Section Lost, Stolen, Destroyed and Mutilated Notes Section Trustee s Authentication Certificate Section Cancellation and Destruction of Notes by the Trustee Section Temporary Notes Section Issuance of Notes Section Residual Rights ARTICLE III REDEMPTION OF NOTES Section Redemption Section Form of Redemption Notice Section Notes Payable on Redemption Date ARTICLE IV PROVISIONS APPLICABLE TO THE NOTES; DUTIES OF THE CORPORATION Section Payment of Notes Section Covenant To Perform Obligations Under This Indenture Section Administration Section Enforcement and Amendment of Guaranty Agreements Section Enforcement and Amendment of Certificates of Insurance Section Financing, Collection and Assignment of Student Loans Section Enforcement of Financed Student Loans Section Servicing and Enforcement of Servicing Agreements Section Administration and Collection of Financed Student Loans Section Administration and Enforcement of Administration Agreements Section Books of Account; Annual Audit; Inspection Rights Section Statement as to Compliance by Corporation Section Continuing Existence and Qualification Section Other Corporation Obligations Section Tax Treatment of the Notes Section Eligible Loans Section Recordation of the Indenture and Filing of Security Instruments; Financing Statements... 39

3 Section No Waiver of Laws Section Representations and Covenants of the Corporation Regarding the Trustee s Security Interest Section Further Covenants of the Corporation Regarding the Trustee s Security Interest Section Certain Reports Section Parity and Priority of Lien Section Not an Investment Company Section Continuing Disclosure Section Student Loan Purchase Agreements ARTICLE V FUNDS Section Creation and Continuation of Funds and Accounts Section Collection Fund Section Acquisition Fund Section Debt Service Reserve Fund Section Department Reserve Fund Section Capitalized Interest Fund Section Investment of Funds Held by Trustee Section Release ARTICLE VI DEFAULTS AND REMEDIES Section Events of Default Defined Section Remedy on Default; Possession of Trust Estate Section Remedies on Default; Advice of Counsel Section Remedies on Default; Sale of Trust Estate Section Appointment of Receiver Section Restoration of Position Section Purchase of Properties by Trustee or Registered Owners Section Application of Sale Proceeds Section Accelerated Maturity Section Remedies Not Exclusive Section Direction of Trustee Section Right To Enforce in Trustee Section Physical Possession of Obligations Not Required Section Waivers of Events of Default Section Collection on Indebtedness and Suits for Enforcement by the Trustee ARTICLE VII THE TRUSTEE Section Acceptance of Trust Section Recitals of Others Section As to Filing of Indenture Section Trustee May Act Through Agents Section Indemnification of Trustee ii

4 Section Trustee s Right to Reliance Section Compensation of Trustee Section Trustee May Own Notes Section Resignation of Trustee Section Removal of Trustee Section Successor Trustee Section Manner of Vesting Title in Trustee Section Additional Covenants by the Trustee To Conform to the Higher Education Act Section Right of Inspection Section Limitation With Respect to Examination Section Servicing Agreements Section Additional Covenants of Trustee Section Duty of Trustee With Respect to Rating Agencies Section Merger of the Trustee, Etc Section Receipt of Funds From and Actions of Servicer or Custodian Section Survival of Trustee s Rights To Receive Compensation, Reimbursement and Indemnification Section Article Controlling As to Trustee Conduct and Liability Section Trustee May File Proofs of Claim ARTICLE VIII SUPPLEMENTAL INDENTURES Section Supplemental Indentures Not Requiring Consent of Registered Owners Section Supplemental Indentures Requiring Consent of Registered Owners Section Additional Limitation on Modification of Indenture ARTICLE IX GENERAL PROVISIONS Section Notices Section Covenants Bind Corporation Section Lien Created; Security Agreement Section Severability of Lien Section Consent of Registered Owners Binds Successors Section Nonliability of Persons; No General Obligation Section Nonpresentment of Notes Section Security Agreement Section Laws Governing Section No Petition Section Severability Section Exhibits Section Non-Business Days Section Parties Interested Herein Section Notes Are Limited Obligations of the Corporation and Not a Debt of the State of Indiana Section Financed Student Loans Section Effect of Headings and Table of Contents iii

5 Section Subcontractors ARTICLE X PAYMENT AND CANCELLATION OF NOTES AND SATISFACTION OF INDENTURE Section Trust Irrevocable Section Satisfaction of Indenture Section Optional Release of All Financed Student Loans Section Cancellation of Paid Notes EXHIBIT A-1 FORM OF DISTRIBUTION DATE CERTIFICATE EXHIBIT A-2 FORM OF DISTRIBUTION DATE INFORMATION FORM EXHIBIT A-3 FORM OF MONTHLY LOAN REPORT EXHIBIT B FORM OF NOTES EXHIBIT C BORROWER BENEFITS iv

6 INDENTURE OF TRUST THIS INDENTURE OF TRUST, dated as of November 1, 2014 (this Indenture ), is by and between INDIANA SECONDARY MARKET FOR EDUCATION LOANS, INC., a private nonprofit corporation duly organized and existing under the laws of the State of Indiana (the Corporation ) and ZIONS FIRST NATIONAL BANK, a national banking association duly organized and existing under the banking laws of the United States with offices in Denver, Colorado (the Trustee ), as trustee hereunder. All capitalized terms used but not defined in these preambles, the recitals and Granting Clauses shall have the same meanings assigned thereto in Article I hereof. W I T N E S S E T H : WHEREAS, pursuant to the laws of the State of Indiana, including particularly the Authorizing Act, the Corporation is authorized to issue notes to finance or refinance the origination or acquisition of student loans; and WHEREAS, the Corporation represents that it, by proper action, has duly authorized the execution and delivery of this Indenture, which Indenture provides for the issuance and payment of Student Loan Asset-Backed Notes, Series 2014 (Taxable LIBOR Floating Rate Notes) (as defined in Article I hereof, the Notes ) pursuant to the terms hereof; and WHEREAS, the Trustee has agreed to accept the trusts herein created upon the terms herein set forth; and WHEREAS, it is hereby agreed between the parties hereto and the Registered Owners of the Notes (the Registered Owners evidencing their consent by their acceptance of the Notes), that in the performance of any of the agreements of the Corporation herein contained, any obligation it may thereby incur for the payment of money shall not be a general debt or obligation of the Corporation, but shall be secured by and payable solely from the Trust Estate, payable in such order of preference and priority as provided herein; NOW, THEREFORE, the Corporation, in consideration of the premises and acceptance by the Trustee of the trusts herein created, of the purchase and acceptance and purchase of the Notes by the Registered Owners thereof, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, does hereby GRANT A SECURITY INTEREST IN, PLEDGE, ASSIGN AND DELIVER to the Trustee, for the benefit of the Registered Owners of the Notes, all of its right, title and interest in, to and under, in each case, whether now owned or existing or hereafter acquired or arising, and wherever located, the moneys, rights, and properties described in granting clauses A through H below (collectively, the Trust Estate ), as follows: The Financed Student Loans; GRANTING CLAUSE A

7 GRANTING CLAUSE B The rights of the Corporation under any Servicing Agreements, Custodian Agreements, Administration Agreements, Joint Sharing Agreement, any Student Loan Purchase Agreements, and Guaranty Agreements and any assignments thereof, as the same relate to Financed Student Loans; GRANTING CLAUSE C Interest payments, proceeds, charges and other income received by the Trustee or the Corporation with respect to Financed Student Loans made by or on behalf of borrowers accrued and paid on or after the applicable Cut-Off Date; GRANTING CLAUSE D All amounts received on or after the applicable Cut-Off Date in respect of payment of principal of Financed Student Loans, and all other obligations of the borrowers thereunder, including, without limitation, scheduled, delinquent and advance payments, payouts or prepayments, and proceeds from the guarantee, or from the sale, assignment or other disposition, of Financed Student Loans; GRANTING CLAUSE E Any applicable Special Allowance Payments paid on or after the applicable Cut-Off Date, subject to recapture of excess interest on certain Financed Student Loans, or any similar allowances authorized from time to time by federal law or regulation; GRANTING CLAUSE F Any applicable Interest Subsidy Payments paid on or after the applicable Cut-Off Date, or payable in respect of any Financed Student Loan; GRANTING CLAUSE G Available Funds (other than moneys released from the lien of this Indenture as provided herein), together with all moneys and investments held in the Funds described in Section 5.01(a) hereof (other than the moneys and investments held in the Department Reserve Fund), including all proceeds thereof and all income thereon; and GRANTING CLAUSE H Any proceeds from any property described in these Granting Clauses, and any and all other property, rights and interests of every kind or description that from time to time hereafter is granted, conveyed, pledged, assigned, or transferred or delivered to the Trustee as and for additional security hereunder. TO HAVE AND TO HOLD the Trust Estate, whether now owned or held or hereafter acquired, unto the Trustee and its successors or assigns; 2

8 IN TRUST NEVERTHELESS, upon the terms and trusts herein set forth for the equal and proportionate benefit and security of all present and future Registered Owners of the Notes, without preference of any Note over any other, except as provided herein, and for enforcement of the payment of the Notes in accordance with their terms, and all other sums payable hereunder or on the Notes, and for the performance of and compliance with the obligations, covenants, and conditions of this Indenture; PROVIDED, HOWEVER, that if the Corporation, its successors or assigns, shall well and truly pay, or cause to be paid, the principal of the Notes and the interest due and to become due thereon, or provide fully for payment thereof as herein provided, at the times and in the manner mentioned in the Notes according to the true intent and meaning thereof, and shall make all required payments into the Funds and Accounts as required under Article V hereof, or shall provide, as permitted hereby, for the payment thereof by depositing with the Trustee sums sufficient to pay or to provide for payment of the entire amount due and to become so due as herein provided, then this Indenture (other than Sections 4.20, 7.05, 7.21, 9.06 and 9.15 hereof) and the rights hereby granted shall cease, terminate and be void; otherwise, this Indenture shall be and remain in full force and effect; NOW, THEREFORE, it is mutually covenanted and agreed as follows: ARTICLE I DEFINITIONS AND USE OF PHRASES Capitalized terms used herein and not otherwise defined shall have the following meanings set forth below, as applicable, unless the context clearly requires otherwise: 1998 Indenture means the Trust Indenture, dated as of October 1, 1998, by and between the Corporation and Zions First National Bank, as successor trustee, as supplemented and amended. Account shall mean any of the accounts created and established within any Fund pursuant to this Indenture. Acquisition Fund shall mean the Fund by that name created in Section 5.01(a) hereof and further described in Section 5.03 hereof, including any additional Accounts and Subaccounts created therein. Adjusted Pool Balance shall mean, for any Distribution Date, the sum of the Pool Balance as of the last day of the related Collection Period, plus the amounts then on deposit in the Capitalized Interest Fund and the Debt Service Reserve Fund for such Distribution Date. Administration Agreements shall mean any agreements between the Corporation and any sub-administrator engaged by the Corporation, as amended and supplemented. Administration Fees shall mean (a) for December 26, 2014, a fee equal to 0.50% of the Pool Balance as of the Issue Date, based on the actual number of days elapsed from the Issue Date to November 30, 2014 (based on a 30 day month divided by 360), (b) for each Distribution 3

9 Date prior to the December 2020 Distribution Date, a monthly fee equal to (i) 1/12th of 0.50% of the Pool Balance as of the last day of the related Collection Period if the Parity Ratio is greater than or equal to 103.5% or (ii) 1/12 th of 0.30% of the Pool Balance as of the last day of the related Collection Period if the Parity Ratio is less than 103.5%, and (c) for each Distribution Date on or after the December 2020 Distribution Date, a monthly fee equal to (i) 1/12th of 0.50% of the Pool Balance as of the last day of the related Collection Period if the Parity Ratio is greater than or equal to 104.5% or (ii) 1/12 th of 0.30% of the Pool Balance as of the last day of the related Collection Period if the Parity Ratio is less than 104.5%. Administrator shall mean the Corporation or, as the context may require, any sub-administrator engaged by the Corporation to the extent such engagement is made pursuant to and in accordance with the terms of this Indenture. The Corporation shall provide each Rating Agency with notice of any removal or replacement of the Administrator or the appointment of a new Administrator. Administrator Default means the occurrence of any of the following events: (a) the Administrator defaults in the performance of, or otherwise fails to perform, any of its administrative duties under this Indenture with respect to the administration of the Trust Estate and, after written notice of such default, does not cure such default within 60 days (or, if such default cannot be cured in such time, does not give within 60 days such assurance of cure as shall be reasonably satisfactory to the Trustee); (b) to the extent permitted by applicable law, a court having jurisdiction in the premises enters a decree or order for relief, and such decree or order has not been vacated within 90 days, in respect of the Administrator in any involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect or appoint a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for the Administrator or any substantial part of its property or order the winding-up or liquidation of its affairs; or (c) to the extent permitted by applicable law, the Administrator commences a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, consents to the entry of an order for relief in an involuntary case under any such law, or consents to the appointment of a receiver, liquidator, assignee, trustee, custodian, sequestrator or similar official for the Administrator or any substantial part of its property, consents to the taking of possession by any such official of any substantial part of its property, makes any general assignment for the benefit of creditors or shall fail generally to pay its debts as they become due. Affiliate shall mean, with respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person. For the purposes of this definition, control when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms controlling and controlled have meanings correlative to the foregoing. 4

10 Applicable Rating Criteria for Investment Securities shall mean: (a) for as long as S&P is a Rating Agency maintaining a Rating on Notes Outstanding, a rating by S&P of no lower than AA- (or the equivalent), if a long-term rating is applicable to such Investment Securities, or a rating by S&P of no lower than A-1+ or AAAm (or the equivalent of such ratings), if a short term rating is applicable to such Investment Securities, and such Investment Security has a maturity of 365 days or less; and (b) for as long as Fitch is a Rating Agency maintaining a Rating on Notes Outstanding, a rating by Fitch of no lower than AA- (or the equivalent), if a long term rating is applicable to such Investment Securities, or a rating by Fitch of no lower than F1+ or AAAmmf (or the equivalent of such ratings), if a short term rating is applicable to such Investment Securities, and such Investment Security has a maturity of 365 days or less. Authorized Denominations shall mean $100,000 and integral multiples of $1,000 in excess thereof. Authorized Officer shall mean, when used with reference to the Corporation, its Chairman, President and CEO, Vice President and CFO, Secretary and, in the case of any act to be performed or duty to be discharged, any other member, officer or employee of the Corporation then authorized to perform such act or discharge such duty. Authorized Representative shall mean, when used with reference to the Corporation, (a) an Authorized Officer, (b) the Administrator (if different than the Corporation) or (c) an individual designated in writing by an Authorized Officer of the Corporation to act on the Corporation s behalf under this Indenture. Authorizing Act shall mean the not-for-profit corporation laws of the State of Indiana and I.C , as the same may be amended from time to time. Available Funds means, as to a Distribution Date, the sum of the following amounts received with respect to the related Collection Period: (a) all collections on the Financed Student Loans received by a Servicer on the Financed Student Loans, including any Guaranty and Insurance Payments, but net of: (i) any collections in respect of principal on the Financed Student Loans applied to repurchase Guaranteed student loans (to the extent such student loans were previously Financed Student Loans or Student Loans previously financed under the 1998 Indenture (provided, however, that repurchased Student Loans previously financed under the 1998 Indenture shall not exceed $3,000,000 in aggregate principal amount)) from a Guaranty Agency under the applicable Guaranty Agreement or from a Servicer pursuant to the applicable Servicing Agreement, 5

11 (ii) amounts required to be paid pursuant to any Joint Sharing Agreement, and (iii) amounts required by the Higher Education Act to be paid to the Department (including, but not limited to, any Monthly Consolidation Loan Rebate Fees and any Department Rebate Interest Amounts to be deposited into the Department Reserve Fund or paid directly to the Department), any Guaranty Agency (other than as set forth in clause (i)) or to be repaid to borrowers, whether or not in the form of a principal reduction of the applicable Financed Student Loan, on the Financed Student Loans for that Collection Period or prior Collection Periods, if any; (b) any Interest Subsidy Payments and Special Allowance Payments received by the Trustee or the Corporation with respect to the Financed Student Loans; (c) all Liquidation Proceeds of any Financed Student Loans which became Liquidated Student Loans during that Collection Period in accordance with the applicable Servicer s customary servicing procedures, and all recoveries on Financed Student Loans (whether principal or otherwise) which were written off in prior Collection Periods or during that Collection Period; (d) the aggregate amounts, if any, received on the Financed Student Loans from (1) a Seller pursuant to its Student Loan Purchase Agreement, (2) any Servicer as reimbursement of non-guaranteed interest amounts, or lost Interest Subsidy Payments and Special Allowance Payments pursuant to its Servicing Agreements, (3) the Corporation pursuant to its repurchase obligation pursuant to Sections 4.08(e) and 4.14 hereof, or (4) the Corporation (or on behalf of the Corporation) from any other Person in connection with the optional release of the Financed Student Loans pursuant to Section hereof; (e) the aggregate Purchase Amounts, if any, received for the repurchase of Financed Student Loans from a Seller under its Student Loan Purchase Agreement, any Servicer under its Servicing Agreement, or the Corporation under this Indenture, respectively; (f) amounts received pursuant to the Servicing Agreements during that Collection Period as yield or principal adjustments or any other amounts payable to the Trust Estate by a Servicer pursuant to its Servicing Agreement; (g) investment earnings or gains realized from the investment of amounts on deposit in each Trust Fund; (h) any amount received pursuant to a Joint Sharing Agreement; (i) all funds then on deposit in the Acquisition Fund that are required under Section 5.03 hereof to be transferred into the Collection Fund eleven days after the Issue Date; 6

12 (j) amounts transferred from the Capitalized Interest Fund pursuant to Section 5.06 hereof; and (k) amounts transferred from the Debt Service Reserve Fund in excess of the Debt Service Reserve Fund Requirement as of that Distribution Date pursuant to Section 5.04 hereof; provided that if on any Distribution Date there would not be sufficient funds, after application of Available Funds, as defined above, to pay any of the items specified in clauses (i) through (v), inclusive, of Section 5.02(b) hereof, relating to such distributions, after application of amounts available from the Debt Service Reserve Fund pursuant to Section 5.04 hereof, then Available Funds for that Distribution Date will include amounts held by the Trustee for deposit into the Collection Fund on the related Interest Rate Determination Date which would have constituted Available Funds for the Distribution Date following that Distribution Date, up to the amount necessary to pay such items, and the Available Funds for the following Distribution Date will be adjusted accordingly. Back-up Servicer shall mean a successor Servicer or an additional Servicer who is one of the Department s Title IV Additional Servicers and has entered into a back-up servicing agreement with the Corporation. Basic Documents means this Indenture and any Servicing Agreement, any Custodian Agreement, any Administration Agreement, any Student Loan Purchase Agreement, any Joint Sharing Agreement, each Guaranty Agreement and any other documents signed by the Corporation or required by the Higher Education Act, with respect to the Financed Student Loans. Beneficial Owner shall mean a Person who has an ownership interest in the Notes Outstanding in book-entry form. Board shall mean the Board of Directors of the Corporation. Book-Entry System shall mean the system maintained by the Securities Depository described in Section 2.01(g) hereof. Business Day shall mean (i) for purposes of calculating the LIBOR Rate, any day on which banks in New York, New York and London, England are open for the transaction of international business; and (ii) for all other purposes, any day other than a Saturday, Sunday, legal holiday or any other day on which banks located in New York, New York or the city in which the Principal Office of the Trustee is located are authorized or permitted by law, regulation or executive order to close. Capitalized Interest Fund shall mean the Fund by that name created in Section 5.01(a) hereof and further described in Section 5.06 hereof. Certificate of Insurance shall mean any certificate evidencing a Financed Student Loan is Insured pursuant to a Contract of Insurance. 7

13 Code shall mean the Internal Revenue Code of 1986, as amended from time to time. Each reference to a section of the Code herein shall be deemed to include the United States Treasury Regulations, including applicable temporary and proposed regulations, relating to such section. A reference to any specific section of the Code shall be deemed also to be a reference to the comparable provisions of any enactment which supersedes or replaces the Code thereunder from time to time. Collection Fund shall mean the Fund by that name created in Section 5.01(a) hereof and further described in Section 5.02 hereof. Collection Period shall mean, with respect to any Distribution Date, the calendar month period ending on the last day of the month preceding such Distribution Date. However, the initial Collection Period will be the period from the Issue Date through December 31, Consolidation Financed Student Loan shall mean a loan originated pursuant to Section 428C of the Higher Education Act. Continuing Disclosure Agreement shall mean any Continuing Disclosure Agreement or Continuing Disclosure Certificate entered into or executed by the Corporation pursuant Rule 15c2-12 adopted by the Securities and Exchange Commission under the Exchange Act, as such rule may be amended from time to time. Contract of Insurance means, with respect to a Student Loan, an agreement between the Corporation and the Secretary providing for Insurance on such Student Loan. Corporation shall mean the Indiana Secondary Market for Education Loans, Inc., a private nonprofit corporation duly organized and existing under the laws of the State of Indiana, or any body, agency, or instrumentality of the State of Indiana or other entity which shall hereafter succeed to the powers, duties and functions of the Corporation. Corporation Order shall mean a written order signed in the name of the Corporation by an Authorized Representative. Custodian Agreement shall mean any custodian agreement among the Corporation, the Trustee and a Servicer or other custodian or bailee related to any Financed Student Loans. Cut-Off Date shall mean, with respect to any Eligible Loans that are Financed and pledged to the Trustee under this Indenture, the date on which such Eligible Loan is pledged to the Trustee under this Indenture. Debt Service Reserve Fund shall mean the Fund by that name created in Section 5.01(a) hereof and further described in Section 5.04 hereof. Debt Service Reserve Fund Requirement shall mean a minimum amount equal to (a) $770, on the Issue Date and (b) on any other Distribution Date, the greater of 0.50% of the Pool Balance as of the last day of the related Collection Period or $250,000. 8

14 Department shall mean the United States Department of Education, an agency of the federal government. Department Rebate Interest Amount shall mean, with respect to any date of determination, the greater of (a)(i) the amount of interest paid by borrowers on the Financed Student Loans first disbursed on or after April 1, 2006, that exceeds the Special Allowance Payment support levels applicable to such Financed Student Loans under the Higher Education Act since the prior Department Rebate Payment Date less (ii) the amount of accrued Interest Subsidy Payments or Special Allowance Payments due to the Corporation since the prior Department Rebate Payment Date and (b) $0.00. Department Rebate Payment Date shall mean the quarterly date that (i) the Department Rebate Interest Amount is due and payable to the Department or (ii) the Department offsets the Department Rebate Interest Amount from Interest Subsidy Payments or Special Allowance Payments due to the Corporation. Department Reserve Fund shall mean the Fund so designated which is created by Section 5.01(a) hereof and further described in Section 5.05 hereof. Department Reserve Fund Requirement shall mean as of any Distribution Date, an amount necessary to bring the balance of the Department Reserve Fund up to an amount equal to the sum of: (a) the expected Department Rebate Interest Amount accrued through the last day of the related Collection Period; (b) any Monthly Consolidation Loan Rebate Fees accrued through the last day of the related Collection Period; (c) any other accrued payments that are payable to the Department as accrued through the last day of the related Collection Period; (d) any payment then due and payable to a Guaranty Agency relating to its Guaranty of Financed Student Loans; and (e) any other such payment then accrued to the Corporation, another entity or trust estate, if amounts under this Indenture due to the Department or a Guaranty Agency with respect to the Financed Student Loans were paid by the Corporation or such other entity or trust estate, pursuant to any Joint Sharing Agreement, in each case together with any amounts unpaid from prior periods and as evidenced by a Certificate of the Corporation. Distribution Date shall mean the 25 th day of each calendar month, commencing on January 26, 2015; provided, however, that if the 25 th day of the month is not a Business Day, then the Distribution Date shall be the next succeeding Business Day. Distribution Date Certificate shall have the meaning set forth in Section 4.21 hereof and shall be substantially in the form of Exhibit A-1 attached hereto. Distribution Date Information Form shall have the meaning set forth in Section 4.21 hereof and shall be substantially in the form of Exhibit A-2 attached hereto. Eligible Borrower means a borrower who is eligible under the Higher Education Act to be the obligor of a loan for financing a program of education at an Eligible Institution, including a borrower who is eligible under the Higher Education Act to be an obligor of a loan made pursuant to Section 428A, 428B and 428C of the Higher Education Act. 9

15 Eligible Institution means (a) an institution of higher education, (b) a vocational school or (c) any other institution which, in all of the above cases, has been approved by the Department and the applicable Guaranty Agency. Eligible Lender shall mean (a) the Corporation and (b) any eligible lender, as defined in the Higher Education Act, which has received an eligible lender number or other designation from the Secretary with respect to Student Loans made under the Higher Education Act. Eligible Loan means any Student Loan that is a Higher Education Act Loan: Act; (a) (b) (c) (d) which was originated or acquired by the Corporation; which complies with all applicable provisions of the Higher Education which has been fully disbursed; the Obligor for which is an Eligible Borrower; (e) which, if such Student Loan is a subsidized Stafford Loan, qualifies the holder thereof to receive Interest Subsidy Payments and Special Allowance Payments from the Department of Education; if such Student Loan is a Consolidation Financed Student Loan, such Student Loan qualifies the holder thereof to receive Interest Subsidy Payments and Special Allowance Payments from the Department of Education to the extent applicable; and if such Student Loan is a PLUS/SLS Loan or an unsubsidized Stafford Loan, such Student Loan qualifies the holder thereof to receive Special Allowance Payments from the Department to the extent applicable; (f) which provides or, when the payment schedule with respect thereto is determined, will provide for payments on a periodic basis that will fully amortize the Principal Balance thereof by its maturity, as such maturity may be modified in accordance with applicable deferral and forbearance periods granted in accordance with applicable laws, including the Higher Education Act and any Guaranty Agreements, as applicable; (g) which is denominated and payable only in United States dollars in the United States or one of its territories; (h) which, together with the related promissory note therefor, represents the genuine, legal, valid and binding payment obligation of the related Obligor, enforceable by or on behalf of the holder thereof against such Obligor in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, fraudulent conveyance and similar laws relating to creditors rights generally and subject to general principles of equity; and which has not been satisfied, subordinated or rescinded and as to which no right of rescission, setoff, counterclaim or defense has been asserted or, to the knowledge of the Corporation, overtly threatened in writing; 10

16 (i) which, together with the promissory note related thereto, does not contravene in any material respect any laws, rules, or regulations applicable thereto; (j) Obligor; (k) custodian; which is assignable without the consent of, or notice to, any related which is evidenced by a promissory note which is held by a Servicer or its (l) which is Insured, or is Guaranteed (at a level no less than 97% of principal and accrued interest) under, and the subject of, a valid Guaranty Agreement with a Guaranty Agency; (m) which does not carry a rate of interest less than, or in excess of, the applicable rate of interest required by the Higher Education Act (if the Higher Education Act permits the Corporation to charge an interest rate less than the applicable rate of interest, such Student Loan will not bear interest at a rate lower than the applicable rate of interest, provided, however, such Eligible Loan may be subject to borrower benefits as described in Exhibit C hereto); (n) which immediately prior to it being Financed hereunder, is owned by the Corporation free and clear of any lien, security interest, charge, encumbrance or other right or claim or restriction in favor of any other Person; and (o) the payment terms of which have not been altered or amended except in accordance with the Higher Education Act. E-loans shall mean Eligible Loans which are electronically signed. Escrow Agreement shall mean the Escrow Agreement dated as of November 1, 2014, between the Corporation and Zions First National Bank, as escrow agent and trustee under the 1998 Indenture. Escrow Fund shall mean the Escrow Fund created pursuant to the terms of the Escrow Agreement. Event of Bankruptcy shall mean to the extent permitted by applicable law (a) the Corporation shall have commenced a voluntary case or other proceeding seeking liquidation, reorganization, or other relief with respect to itself or its debts under any bankruptcy, insolvency, or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian, or other similar official of it or any substantial part of its property, or shall have made a general assignment for the benefit of creditors, or shall have declared a moratorium with respect to its debts or shall have failed generally to pay its debts as they become due, or shall have taken any action to authorize any of the foregoing; or (b) an involuntary case or other proceeding shall have been commenced against the Corporation seeking liquidation, reorganization, or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, 11

17 liquidator, custodian, or other similar official of it or any substantial part of its property, provided such action or proceeding is not dismissed within 60 days. Event of Default shall have the meaning specified in Article VI hereof. Exchange Act shall mean the Securities Exchange Act of 1934, as amended. Existing Securities shall mean the various series of outstanding bonds issued by the Corporation pursuant to the 1998 Indenture. Financed or Financing, when used with respect to Student Loans, shall mean or refer to Student Loans (a) deposited in, or otherwise constituting a part of, the Trust Estate and (b) substituted or exchanged as permitted hereby for Financed Student Loans but, in any event shall not include Student Loans released from the lien of this Indenture pursuant to the terms hereof. Fiscal Year shall mean the fiscal year of the Corporation as established from time to time; currently, the Fiscal Year of the Corporation commences each July 1 and ends each June 30. Fitch shall mean Fitch Inc., Fitch Ratings Ltd., its subsidiaries and its successors and assigns. Funds shall mean each of the funds created pursuant to Section 5.01 hereof. Guaranty or Guaranteed shall mean with respect to a Student Loan, the insurance or guaranty by a Guaranty Agency pursuant to such Guaranty Agency s Guaranty Agreement of the maximum percentage of the principal of and accrued interest on such Student Loan allowed by the terms of the Higher Education Act with respect to such Student Loan at the time it was originated and the coverage of such Student Loan by the federal reimbursement contracts, providing, among other things, for reimbursement to such Guaranty Agency for payments made by it on defaulted Student Loans insured or guaranteed by such Guaranty Agency of at least the minimum reimbursement allowed by the Higher Education Act with respect to a particular Student Loan. Guaranty Agency shall mean any entity authorized to guaranty student loans under the Higher Education Act and reinsured by the Department. Guaranty Agreement shall mean a guaranty or lender agreement between any Guaranty Agency and the Corporation or another Eligible Lender under the Higher Education Act, and any amendments thereto. Guaranty and Insurance Payments shall mean with respect to any Financed Student Loan, any payment made by a Guaranty Agency pursuant to a Guaranty Agreement or any payment made by the Secretary pursuant to the Insurance provided by it under the Higher Education Act, in respect of such Student Loan. 12

18 Higher Education Act shall mean the Higher Education Act of 1965, as amended or supplemented from time to time, or any successor federal act and all regulations, directives, bulletins, and guidelines promulgated from time to time thereunder. Higher Education Act Loan means any Higher Education Act, Title IV, Part B loan made to finance post-secondary education that is made under the Higher Education Act. Indenture shall mean this Indenture of Trust, including all supplements and amendments hereto. Index Maturity shall mean with respect to any Interest Period, a period of time equal to one month with respect to One-Month LIBOR Rate or two months with respect to Two-Month LIBOR Rate, as applicable. Initial Interest Period shall mean the period beginning on the Issue Date and ending on the day before the first Distribution Date for the Notes. Initial LIBOR Indexed Rate shall mean Two-Month LIBOR plus 0.80% per annum. Initial Pool Balance shall mean the Pool Balance as of the Issue Date. Initial Purchaser shall mean Merrill Lynch, Pierce Fenner & Smith Incorporated, as the initial purchaser of the Notes. Insurance or Insured or Insuring shall mean with respect to a Student Loan, the insuring by the Secretary (as evidenced by a Certificate of Insurance or other document or certification issued under the provisions of the Higher Education Act) under the Higher Education Act of all or a portion of the principal of and accrued interest on such Student Loan. Interest Accrual Amount shall mean, for any Distribution Date, the aggregate amount of interest accrued at the related LIBOR Indexed Rate for the related Interest Period (or at the Initial LIBOR Indexed Rate for the Initial Interest Period) on the Outstanding Amount of the Notes as of the immediately preceding Distribution Date after giving effect to all principal distributions to the Noteholders on that preceding Distribution Date, or in the case of the first Distribution Date, on the Issue Date. Interest Distribution Amount shall mean, for any Distribution Date, the sum of (i) the Interest Accrual Amount and (ii) the Interest Shortfall for that Distribution Date. Interest Period shall mean, with respect to the initial Distribution Date, the Initial Interest Period and with respect to each subsequent Distribution Date shall mean the period commencing on and including the prior Distribution Date and ending on and including the day before such current Distribution Date. Interest Rate Determination Date shall mean the second Business Day immediately preceding each Distribution Date or, with respect to the first Interest Rate Determination Date, the second Business Day immediately preceding the Issue Date. 13

19 Interest Shortfall shall mean, for any Distribution Date, the excess of (i) the Interest Distribution Amount on the preceding Distribution Date, over (ii) the amount of interest actually distributed to the Noteholders on that preceding Distribution Date, plus interest on the amount of that excess, to the extent permitted by law, at the applicable LIBOR Indexed Rate for the applicable Interest Period. Interest Subsidy Payment shall mean an interest payment on Student Loans received pursuant to the Higher Education Act and an agreement with the federal government, or any similar payments. Investment Securities shall mean the following; provided, however, that whenever this definition requires a Rating on an investment, such Rating is required only from those Rating Agencies then maintaining a Rating on Notes Outstanding under this Indenture: (a) direct obligations of, or obligations on which the timely payment of the principal of and interest on which are unconditionally and fully guaranteed by, the United States of America, and meeting the Applicable Rating Criteria for Investment Securities; (b) interest-bearing time or demand deposits, certificates of deposit or other similar banking arrangements with any bank, trust company, national banking association or other depository institution, including those of the Trustee, provided that, at the time of deposit or purchase such depository institution has ratings meeting the Applicable Rating Criteria for Investment Securities; (c) bonds, debentures, notes, discount notes, short-term obligations or other evidences of indebtedness issued or guaranteed by (1) any of the following agencies: Farm Credit System; Federal Home Loan Mortgage Corporation; the Federal National Mortgage Association; Federal Home Loan Banks provided that such obligations, or the issuer or guarantor of such obligations, meet the Applicable Rating Criteria for Investment Securities; or (2) any agency or instrumentality of the United States of America which shall be established for the purposes of acquiring the obligations of any of the foregoing or otherwise providing financing therefor; (d) repurchase agreements and reverse repurchase agreements, other than overnight repurchase agreements and overnight reverse repurchase agreements, with banks, including the Trustee and any of its Affiliates, which are members of the Federal Deposit Insurance Corporation or firms which are members of the Security Investors Protection Corporation, in each case whose outstanding, unsecured debt securities meet the Applicable Rating Criteria for Investment Securities; (e) overnight repurchase agreements and overnight reverse repurchase agreements with respect to securities issued or guaranteed by the United States government or its agencies as well as debt obligations issued by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation which may include mortgage-backed and mortgage pass through securities but may not include derivative instruments, which overnight repurchase agreements or overnight reverse repurchase agreements are executed by a bank or trust company or by primary or other 14

20 reporting dealers to the Federal Reserve Bank of New York which transferor of such securities continuously meets the Applicable Rating Criteria for Investment Securities, if: (i) the obligations that are subject to such overnight repurchase agreements or overnight reverse repurchase agreements are delivered (in physical or in book-entry form) to the Trustee, or any financial institution serving as custodian for the Trustee, provided that such overnight repurchase agreements or overnight reverse repurchase agreements must provide that the value of the underlying obligations shall be maintained at a current market value, calculated at least weekly, of not less than one hundred and two percent (102%) of the repurchase price, and, provided further, that the financial institution serving either as Trustee or as custodian shall not be the provider of the overnight repurchase agreements or overnight reverse repurchase agreements; (ii) a valid and perfected first security interest in the obligations which are the subject of such overnight repurchase agreements or overnight reverse repurchase agreements has been granted to the Trustee; and (iii) such securities are free and clear of any adverse third party claims; provided, further, that the Rating Agencies shall be given prior written notice describing such overnight repurchase agreements or overnight reverse repurchase agreements; (f) investment agreements, which may be entered into by and among the Corporation and/or the Trustee and any bank, bank holding company, corporation or any other financial institution, including the Trustee and any of its Affiliates, whose outstanding, unsecured debt securities meet the Applicable Rating Criteria for Investment Securities; (g) commercial paper, including that of the Trustee and any of its Affiliates, provided that such obligations meet the Applicable Rating Criteria for Investment Securities; (h) investments in a money market fund, including funds for which the Trustee or an Affiliate thereof acts as investment advisor or provides other similar services for a fee, provided that such obligations meet the Applicable Rating Criteria for Investment Securities; (i) general obligations of any state of the United States, provided that such obligations meet the Applicable Rating Criteria for Investment Securities; (j) general obligations of cities, counties and special purpose districts in any state of the United States, provided that such obligations meet the Applicable Rating Criteria for Investment Securities; (k) obligations of any company, other organization or legal entity incorporated or otherwise created or located within or without the United States if such obligations meet the Applicable Rating Criteria for Investment Securities; 15

21 (l) asset-backed securities (whether considered debt or equity), provided that such securities meet the Applicable Rating Criteria for Investment Securities; and (m) any other investment after the requirements of a Rating Notification have been satisfied, to the extent such Rating Agency is then maintaining a Rating on any Outstanding Notes, provided that such investment meets the Applicable Rating Criteria for Investment Securities. Issue Date shall mean November 25, 2014, the date of original issuance and delivery of the Notes. Joint Sharing Agreement shall mean any joint sharing agreement, as amended and supplemented from time to time, by and among the Corporation, the Trustee and any other party thereto for the purpose of assuring that certain payments received from the Department are properly allocated among all student loans owned by the Corporation. LIBOR Indexed Rate shall mean the interest rate established by the Trustee on each Interest Rate Determination Date and equal to the applicable One-Month LIBOR Rate plus the Spread; provided, however, that with respect to the Initial Interest Period, the LIBOR Indexed Rate shall be the Initial LIBOR Indexed Rate. LIBOR Rate, One-Month LIBOR Rate, or Two-Month LIBOR Rate shall mean, with respect to any Interest Period, the London interbank offered rate for deposits in U.S. dollars having the applicable Index Maturity as it appears on Reuters Screen LIBOR01 Page, or another page of the Reuters Screen or any other financial reporting service in general use in the financial services industry, as of 11:00 a.m., London time, on the related Interest Rate Determination Date as obtained by the Trustee from such source. If this rate does not appear on Reuters Screen LIBOR01 Page, or another page of the Reuters Screen or any other financial reporting service in general use in the financial services industry, the rate for that day will be determined on the basis of the rates at which deposits in U.S. dollars, having the applicable Index Maturity and in a principal amount of not less than $1,000,000, are offered at approximately 11:00 a.m., London time, on that Interest Rate Determination Date, to prime banks in the London interbank market by the Reference Banks. The Trustee will request the principal London office of each Reference Bank to provide a quotation of its rate. If at least two Reference Banks provide quotations, the rate for that day will be the arithmetic mean of the quotations. If fewer than two Reference Banks provide quotations, the rate for that day will be the arithmetic mean of the rates quoted by major banks in New York City, selected by the Administrator at approximately 11:00 a.m., Eastern time, on that Interest Rate Determination Date, for loans in U.S. dollars to leading European banks having the applicable Index Maturity and in a principal amount of not less than $1,000,000. If the banks selected as described above do not provide such quotations, One-Month LIBOR or Two-Month LIBOR, as the case may be, in effect for the applicable Interest Period will be One-Month LIBOR or Two-Month LIBOR, as the case may be, in effect for the previous Interest Period. Liquidated Student Loan shall mean any Financed Student Loan liquidated by a Servicer (which shall not include any Financed Student Loan on which payments are received 16